Brotopia

by Emily Chang

  In just a few years, Stitch Fix became one of the most promising e-commerce companies in Silicon Valley. In 2017, Stitch Fix filed for an IPO and revealed that it was profitable with $977 million in annual sales and about six thousand employees. Other female entrepreneurs hoped Lake would prove to all venture capitalists that they should be investing in more women. That same year, however, a disturbing scandal made it clear that one insanely successful female founder would not change an entire industry—not when that industry had a much bigger problem than it had ever admitted with male investors sexually harassing female entrepreneurs. And Lake was one of the most prominent victims.

  THE PREDATORS IN VC

  In 2013, an investor by the name of Justin Caldbeck, of Lightspeed Venture Partners, led an early investment in Stitch Fix and became a board observer. Multiple sources who were close to Lake at the time say that Caldbeck initially provided invaluable help to the promising start-up, including recruiting new Stitch Fix executives. But at some point he made Lake feel so uncomfortable that she asked Lightspeed to remove him from the board. The following year, Caldbeck left Lightspeed, ostensibly because he wanted to start his own fund, Binary Capital. Lake was asked to sign a nondisparagement agreement, mandating that neither party ever speak of what happened.

  Jeremy Liew, a managing director at Lightspeed, told me, “Justin was with us for a few years. He made some excellent investments, and we mutually decided he would not be part of Fund 10,” that is, Lightspeed’s next fund. To some industry insiders, that was code for “he got fired.” Others I spoke to had never heard rumors of Caldbeck’s being disciplined for questionable behavior. Caldbeck and his new partner, Jonathan Teo, were able to raise $125 million for Binary Capital’s first fund, including a personal investment from Lightspeed partner Ravi Mhatre. Binary made several investments over the next two years. In the meantime, several female entrepreneurs discovered, by talking among themselves, that they weren’t the only ones Caldbeck had sexually harassed.

  Caldbeck had walked on to the Duke University basketball team, got an MBA from Harvard, worked at McKinsey, Bain Capital Ventures, and then Lightspeed. He was once described to me as a “Walking LinkedIn,” an investor who can make an introduction to anyone and everyone. “He is an aggressive personality,” one female entrepreneur told me. “He gets deals done and gets to the right people. He is just a hustler.” Turns out Caldbeck didn’t just hustle deals.

  In 2010, former Googler Niniane Wang started a co-working space for elite entrepreneurs called Sunfire. Sequoia, Benchmark, and other VC firms backed Sunfire in exchange for the opportunity to visit the office and interact with high-potential founders. Bain Capital Ventures, where Caldbeck then worked, was also a sponsor, and sent him as the firm’s representative. Every Thursday, Sunfire held drinks at a nearby bar from 6:00 to 7:00 p.m. One day, Caldbeck told Wang he wanted her opinion on a fashion start-up and asked if they could discuss it in person after the weekly drinks, saying he had a meeting beforehand. By the time he arrived, everyone had left but Wang. When she started to talk about the start-up, Caldbeck stopped her. “Let’s not talk about work,” he said. He went on to grill her about her dating history and comment about outfits she had worn that he thought she looked good in. “He asked to move to a booth,” Wang told me. “He sat so his body was touching my body. At one point, I agreed to let him embrace me.” When Caldbeck drove her home, he kept pressuring her to let him spend the night. Finally, she says, she managed to persuade him to drop her off and leave her alone.

  Wang said she felt ambushed. “I had no mental preparation that this could or would happen, so I had not at all emotionally prepared for what to do. It’s a serious issue to terminate a relationship with a financial backer. I felt trapped. In a personal situation, I could say no more forcefully, but I was worried that it would have financial consequences for other people,” including the other entrepreneurs who shared space at Sunfire.

  After that night, Wang said, Caldbeck pursued her relentlessly, texting and calling at odd hours and suggesting they could have a secret relationship. “I just kept saying no, and then eventually he switched to sending me lots of work messages at inappropriate times.” Caldbeck continued to visit the work space, which made Wang even more uncomfortable. She never reported Caldbeck’s behavior to Bain Capital, but later decided not to renew Bain’s sponsorship. “I always worried that if I said anything, it would cause damage to others, not just to myself, but to others I cared about, and that always gave me a lot of pause,” Wang says.

  Eventually, Wang confided in a fellow female entrepreneur and discovered that the other woman had also had an uncomfortable experience with Caldbeck. “Oh, he’s harassing me too,” she said. A few years later, Wang heard about yet another woman with a Caldbeck story. “I continued to hear rumors about other women,” she said, but Caldbeck was getting away with it. “There seemed to be no consequence,” she told me. “His fund continued to get bigger and bigger. I knew that Justin was continuing to harass more women, and he seemed to be getting more and more bold.” Seven years after her first encounter with Caldbeck, she said, “I felt that I had to stop him.” Wang told her story to Reed Albergotti, a reporter at The Information, and spent hours persuading other women to speak to him as well. In all, six women came forward alleging bad experiences with Caldbeck, but none of them would allow Albergotti to use their names. Wang says the editors at The Information decided they needed at least some of the women to speak on the record. “The only way to get this article published was to use my real name,” Wang said. “I had nothing to gain and a lot to lose.” Still, Wang concluded that her harassment by Caldbeck had already been so painful that she was willing to suffer a little bit more to expose him, plus she was at a strong place in her career, having been a star at Google, the chief technology officer of the online design marketplace Minted, and more recently founded a company called Evertoon.

  Wang decided she would go on the record and persuaded two other entrepreneurs to do so as well: Susan Ho and Leiti Hsu, the co-founders of the travel start-up Journy, both of whom said they had been sexually harassed by Caldbeck. After a fund-raising meeting, Ho says Caldbeck sent her a text message at 1:00 a.m. asking to meet up. She hesitated to meet with him again but decided she had no choice. “We were in a place with our business that was make or break,” Ho told me. Assuming safety in numbers, Ho asked Hsu to accompany her. Midway through the meeting, Caldbeck grabbed Hsu’s thigh under the table. “Like out of nowhere,” Hsu later recalled, explaining to me, “It was just like, wow, the trope of the wealthy, powerful Silicon Valley investor is real—the one that grabs your thigh.” Hsu says she casually shook his hand off.

  When The Information published the allegations against Caldbeck, naming Wang, Ho, and Hsu, the statements from Caldbeck and Binary Capital were surprisingly confident. Caldbeck said, “I strongly deny The Information’s attacks on my character. The fact is, I have always enjoyed respectful relationships with female founders, business partners, and investors.” Binary Capital said the allegations were “false” and that while The Information had “found a few examples which show that Justin has in the past occasionally dated or flirted with women he met in a professional capacity, let’s be clear: there is no evidence that Justin did anything illegal and there is no evidence that any of his investing decisions were affected by his social interests.”

  In the hours after the article went live, the Silicon Valley Twittersphere, which is normally quick to pile on, was quiet. Wang’s worst fear—that she would convince other women to risk their careers and no one would care—seemed to be coming true. Some women did immediately back her. Sarah Lacy of PandoDaily wrote a post begging, “Where’s the outrage?” Ellen Pao sent Wang a message applauding her bravery. When a few VCs tweeted condemnation of Caldbeck’s behavior, Pao retweeted them, adding, “We drive women out of tech if we don’t speak up.”

  The following day, Reid Hoffman spoke up in a big w
ay with a lengthy blog post titled “The Human Rights of Women Entrepreneurs.” Hoffman wrote, “This is entirely immoral and outrageous behavior,” so why the lack of outrage? “Folks may think: well, that’s bad behavior but not my problem. If you think that, and work here in venture, think again,” Hoffman continued. “We all need to solve this problem. If you stay silent, if you don’t act, then you allow this problem to perpetuate.” In his post, Hoffman proposed something other women in tech had suggested to me, building “an industry-wide HR function” that would presumably govern interactions between investors and entrepreneurs and keep individual companies from burying allegations. He also asked that investors who stand against this behavior speak up online and include this hashtag: #DecencyPledge.

  Several investors responded, including Roelof Botha of Sequoia, who tweeted, “At Sequoia we support the #DecencyPledge.” Hoffman’s call to action sent a strong message to female founders that they mattered and led to the airing of some of Greylock’s own dirty laundry. Internally, it emerged that Greylock’s COO, Tom Frangione, had an inappropriate relationship with a female employee. Within three days, Greylock investigated, and Frangione was asked to resign. The firm called it a “significant lapse of judgment” that was “inconsistent” with its values. “If you’re going to talk the talk, you have to walk the walk, and we all moved very quickly on it,” Hoffman told me of the Frangione incident. He also says the partners held a meeting in which they told staff that if anyone knew of any more untoward behavior, they should feel comfortable enough to report it immediately.

  In the days that followed, the story of sexism in venture capital that I had been following for more than a year became a moving target. Several of the women who came forward were women of color. “It’s fucked up and a bit dark,” one female entrepreneur told me. “They’re taking advantage of those who are the most vulnerable.” Things everyone had whispered came out into the open. Investors whom I had been tipped off about as being “bad guys” were exposed. I had spent months trying to persuade women who had confided in me to go on the record. Most felt too ashamed, intimidated, or downright petrified to talk publicly. But after Caldbeck’s public takedown, my in-box was suddenly full of emails from women wanting to openly tell their stories about the investors who had invited them back to their hotel room, tried to kiss them, or even just made a creepy comment about their lipstick. They felt emboldened, empowered, and, to be frank, fed up.

  And slowly the real story emerged: that most women who have tried to raise money in Silicon Valley have not just one or two stories to tell about how someone made them feel uncomfortable but too many stories to count. “Whether it be a snide comment or just a hug that’s a little too grabby,” Hsu says, “this is just stuff that happens all the time.”

  A week after the Caldbeck revelations, Katie Benner at the New York Times published a story in which two dozen women came forward about several different prominent investors. Susan Wu, a longtime entrepreneur, told the Times that she had a bad experience not only with Caldbeck but also with the billionaire venture capitalist Chris Sacca, who she said had once touched her face at a party in a way that made her feel uncomfortable. Sacca preempted the article with a lengthy post that he published hours before the Times story broke that included the phrase “I am sorry” five times. He later disputed Wu’s particular account but admitted that he had played a role in the industry’s larger problem with sexism. “There is no doubt I said and did things that made some women feel awkward, unwelcome, insecure, and/or discouraged,” Sacca wrote.

  Another entrepreneur, Sarah Kunst, told the Times that Dave McClure, a co-founder of the early-stage venture fund 500 Startups, had also made unwelcome advances toward her. After talking to her about a potential job at 500 Startups, McClure sent Kunst a text message, saying, “I was getting confused figuring out whether to hire you or hit on you.” McClure also responded to the allegations with a long-winded apology; his was titled “I’m a Creep. I’m Sorry.” He said he had already been removed as CEO of 500 Startups, due to the allegations, but that he would remain at the company to focus on fiduciary obligations to investors. For the female CEO Cheryl Yeoh, that apology fell short. She published her own account of how McClure, who was an investor in her company, got her drunk at a gathering of tech folk at her apartment.

  Of that night, Yeoh wrote, “Dave kept pouring scotch into my glass . . . suddenly, everyone except Dave decided to order a cab . . . I quickly asked if Dave wanted to leave like the rest of them but he said no. Perplexed, I offered him to crash on the couch or the guest room and proceeded to show him the guest room. Then I went into my own bedroom but Dave followed me there, and that’s when he first propositioned to sleep with me. I said no . . . At this point, I led him to the door and told him he needs to leave. On the way out, he pushed himself onto me to the point where I was backed into a corner, made contact to kiss me, and said something along the lines of ‘Just one night, please just this one time.’ Then he told me how he really likes strong and smart women like me. Disgusted and outraged, I said no firmly again, pushed him away, and made sure he was out my door.” As Yeoh’s post went live, a female partner resigned from 500 Startups, alleging the firm had tried to cover up the allegations against McClure. That same day, McClure left the firm for good. It was becoming clear that bad behavior in the industry had long been tolerated, ignored, or not taken seriously. And everyone wondered how many investors had yet to be exposed, how many never would be, and how many women would remain silent.

  “Usually, the accused knows so many more stories than what has been reported because the people who come forward are the people who did not give in, did not have sex,” Wang says. “The VCs put out these heartfelt apologies . . . and people fall for it. You hear people say, ‘Well, he groped her, but it’s not that bad.’ Well, it is that bad.”

  Toward the end of the summer of 2017, the venture capital firm DFJ (originally named Draper Fisher Jurvetson) launched an independent investigation into alleged misconduct by one of its co-founders, Steve Jurvetson, a longtime friend of Elon Musk, and a Tesla and SpaceX investor. Then, in October, female entrepreneur Keri Krukal publicly posted on Facebook: “Women approached by a founding partner of Draper Fisher Jurvetson should be careful. Predatory behavior is rampant.” Shortly thereafter, Jurvetson left the firm and took a leave of absence from the boards of Tesla and SpaceX. In a Facebook post, he said he had departed due to “interpersonal dynamics” with his partners and implied that the allegations involved personal, rather than professional, relationships. “It is excruciating to learn just how quickly, in one news cycle, people conclude that because I have left DFJ there must be some credence to vicious and wholly false allegations about sexual predation and workplace harassment. Let me be perfectly clear: no such allegations are true,” Jurvetson said. Whatever happened, men in technology were finally being held accountable.

  Just a few weeks later, I published a Bloomberg article in which multiple women claimed they were sexually assaulted or harassed by yet another prominent investor, Shervin Pishevar. In December 2014, Pishevar, an early Uber backer, attended the company’s “Roaring 20s”–themed holiday party with a pony, wearing a Santa hat, on a leash. But that wasn’t the only stunt he allegedly pulled. Pishevar, then forty years old, also approached Uber employee Austin Geidt (then thirty), put his hand on her leg, and moved it up her dress, according to current and former colleagues. Geidt squirmed away, the colleagues say.

  Pishevar, a major Democratic party donor who raised money for President Obama and hosted a fundraiser with George Clooney for presidential candidate Hillary Clinton, was one of Uber’s most influential backers; he maintained an especially close relationship to co-founder Travis Kalanick. Geidt, who joined Uber as its fourth employee and its first woman, was in charge of launching the ride-sharing company in new cities at the time. A person with firsthand knowledge of Pishevar’s behavior toward Geidt confirmed the holiday party account. Th
ough Geidt declined to comment when the story broke, it’s clear Pishevar was in a position of power. He had recently co-founded his own venture fund, Sherpa Capital, and the futuristic tube transportation company Hyperloop One. Pishevar, through his lawyer, denied the allegation and told Bloomberg that he and Geidt always maintained a “friendly, professional relationship.” His representatives also directed us to speak with someone else who had attended the party, and asked not to be named, who claimed that Pishevar couldn’t have touched anyone that night because he had a drink in one hand and the pony leash in the other. The “pony defense” was widely mocked on social media.

  Five other women also told me that Pishevar used his influence to pursue unwanted sexual encounters with them, but declined to reveal their names, citing fears that he could retaliate and destroy their careers. One of the women, an entrepreneur, told me that Pishevar started hitting on her at a dinner meeting to discuss investing in her company, then forcibly kissed and groped her later in the evening. Another woman who works in the tech industry said she met Pishevar for dinner in 2013 to discuss career opportunities. He invited her back to his home, where, she said, “He basically jumped on me, tried to put his tongue down my throat, and I stopped it.” Also that year, a third woman, who Pishevar had hired to work for him, says he repeatedly tried to pressure her into having sex with him. Though she told him she was not interested in a romantic relationship in a Facebook message shared with me, he booked one hotel room for the two of them on a trip. That’s where she says he tried to perform oral sex on her until she convinced him to stop. “It felt really wrong, and it was really confusing at the time,” she told me. “I just remember his big body on top of me. I was young enough to be his daughter.” At the Web Summit conference in November 2013, where Pishevar spoke onstage with Tesla CEO Elon Musk, a fourth woman says she went to an afterparty that Pishevar had organized at a hotel. There, she said, she found herself alone on the couch with Pishevar and another man. Pishevar, she said, was holding a phone—it’s unclear who it belonged to—and was smiling as he was showing her photos of genitalia of women they claimed to have slept with. A fifth woman says Pishevar hired her company to work for him in 2015. He invited her to a party in Los Angeles where, she said, he force-kissed her, then, in the weeks that followed, tried to bully her into dating him.